Closing Down the State


Late March 2024, beginning the second quarter of his first year as President, Javier Milei brought the hammer down on the Argentine state. Milei’s tool of choice is not a hammer but a chainsaw, he has begun to cut the legs out from under the very state that he was elected to govern. This reduction of the state is not the polite pruning of some dry twigs but the noisy collapse of a two hundred year old tree smashing on the forest floor. By the time Milei finishes with his brutal plan to reform Argentina the country might look more like the Gaza Strip than the hyper-capitalist island which is Milei’s economic model, Ireland. Anyone that has taken a critical look at Milei’s extremist economic cult will not be surprised but the orchestrated collapse has only just begun. However the majority of the Argentine population are now being introduced to Milei’s libertarian clear-cut of the Argentine state over the Easter break. For them this has come as a harsh surprise. Most have no idea what is the difference between “neoliberal” and “liberal”. To be more precise they don’t know what “paleo-libertarian” ultraliberalism is all about. Time to take a crash course.[sic.] Buckle your seat belts. This will get ugly.

Javier Milei is a card-carrying member of an extreme faction of the libertarian cult, followers of an obscure dead pseudo-philosopher Murray Rothbard, who also referred to himself an economist. Javier Milei named his dog Murray after him. This sub-cult of ultraliberalism shows a marked disdain for the state and regards any form of societal relations with extreme suspicion. They don’t like national cohesion either, in fact they don’t like the state at all. When Javier Milei’s minister for security, Patricia Bullrich, came into power she attempted to create a law that made it illegal for three or more people to come together in a public place. That law was repealed because it was also the policy of the last dictatorship, but the paranoid authoritarian suspicion behind “collectivism” remains. Former Argentine economics minister Aldo Ferrer called Argentinas “National Density” an essential element for the success of the state. Libertarians have quite the opposite view. They view social cohesion as a mistake they call “collectivism”. Like Margaret Thatcher, Rothbardians view societal cohesion as something to stamp out using competition and social division. Collectivism (or society in general) scares the hell out of them because they can’t put a price on solidarity. The cost Rothbardians put on solidarity is it’s reduction in the personal individual (‘liberty’) to use and to dispose of property. Societal goals are often antagonistic to the absolute power of private capital or property. For example society might advocate for a national park to protect native species, that is a horrific concept to Rothbardians who are precisely neo-feudal. There can be no public ownership even of a city park or a national forest, all must be privately owned. Predictably jobs and wages for Argentina’s park rangers have already taken a hit. Until 2023 there has there ever been a paleo-libertarian president, indeed presiding over a state you wish to eliminate is patently absurd, it is a contradiction in terms. Javier Milei has taken Argentina into uncharted waters, a schizophrenic journey in societal destruction. The last time Argentina tried anything so radical Carlos Saúl Menem was the hero of the IMF (in late 1980’s and early 1990’s). The Menemite experiment in extreme neoliberalism ended in abject disaster in 2001/2002. Curiously Menem’s grave was recently disturbed and on Easter week privatization is back. The tumult of privatisation will be worse this time as the Argentine economy is weaker now and the new president is even more radical.

In uncharted territory forecasting future directions is inherently dangerous. Predicting how the Argentine society will respond to the contraction of their state in the long run is impossible but in the short term the reaction seems less and less stability, which is precisely what the IMF warned Javier Milei of in February. Reactions are, understandably, becoming more emotional and extreme but have yet failed to produce any unified reaction to this new political farce. Were it possible to characterize the reactions of different societal sectors of the population to Milei’s Libertarian reduction of the state, the following divisions of the population might be called a “stakeholder” perspective.

Stakeholders in the reduction of the Argentine State

The following is a list of stakeholder groups in the Argentine economy. None are mutually exclusive, in fact some may overlap and they are presented in no particular order. The idea is to look at the libertarian-driven state shrinkage from various perspectives to compare and contrast.

One group is the government itself, with obvious and not so obvious state interests. Milei describes these as the political caste, they’re his main stated targets for change. His supposed enemy, strangely enough, also seems to include certain members of Milei’s own party. Take for example the brilliant but sinister vicepresident Victoria Villarruel or the machiavellian Martin Menem (yes he is a relation). One might also mention the less refined henchman from a rival libertarian party (of one) Jose Luis Espert, and we cannot leave out the less than brilliant Minister for Foreign Affairs, Diana Mondino, the richest member of the LLA cabinet (now embroiled in a toothfish scandal in Tierra Del Fuego). It might be a slight understatement to say that not all of Argentina’s professional politicians are 100% incorruptible and some rely on reelection to maintain state power to enable them to deal out public contracts to private contractors, assuring them of guaranteed profits in tax money, for a percentage of the action. Corruption takes two to tango and the source of corruption in Argentina (as always) are the negotiators in the higher echelons of the private sector, the service providers. Stakes are high, for the corrupt casta política any libertarian reduction of the state is a threat. Even bland statements from some LLA politician’s that they wish to provide some level of transparency in state and provincial contracts could be a big problem. Transparency threatens their income and their power. These politicians exist among Milei’s own allies in the PRO as well as in the opposition. They include certain corrupt provincial governors of all brands including various unsavoury elements in Peronism and other parties who have been a drain on state resources for decades. The real casta política have made a career out of nepotism and kickbacks and they don’t want to lose power. Confronting such powerful agents of the state (especially at the provincial level) is taking its toll on Milei’s government.

The largest group in the middle and working classes are those affected by the increased costs in services and falling salaries (in real-terms) to pay these costs. These include unemployed people, public and private employees and, particularly, many pensioners who rely on their shrinking pension to stay above the poverty line. This sector is experiencing rising anger and deep depression a direct result of the government’s refusal to recognize their real human needs. Again human needs are not a libertarian concept). They are increasingly negatively affected by massive price-hikes in goods and services (like basic foodstuffs) but they also face new threats like fires and, more recently, floods, as well as the worst ever dengue outbreak in the region. The latter are directly connected to lack of adaptation and failing public services tincapable of dealing with climate change. Again neither concept exist in the libertarian lexicon.

Mass Walk-outs of doctors in public hospitals (Viedma)

The undeclared emergency that is the Argentine dengue epidemic in March has resulted in at least 119 deaths in Argentina (and 1000 in the region). With at least one hundred and sixty thousand active dengue cases to date in Argentina this year and two million in a (declared) emergency in Brazil. Just two years after the COVID-19 pandemic another epidemic has public health back at breaking point. Serums used in dengue diagnosis are ran out in both the public and private Argentine health services and the government is pandering to ridiculous conspiracy theories on increasingly effective dengue vaccines as they did in opposition during COVID. Milei is suggesting banning vaccines or charging 100 dollars an injection (which the poor cannot afford). In short Argentina under Milei is looking increasingly like the loony ultra-right in the northern hemisphere, like the UK or the US. This government is expressly against public health as a concept; something that recent epidemics have shown to be counterproductive. The collapse of the public health system is also aggravated by many more patients now going to public hospitals who previously relied on the private sector. This is a side effect of price hikes and fallen real wages which means the ill can no longer afford health insurance payments. Indeed the health crisis has spread from the sub-tropical capital Buenos Aires to the chilly capital of Rio Negro, Patagonia. The lack of budget for doctor’s wages has led to mass resignations by whole teams of doctors at public hospitals as happened in Viedma’s main hospital.

Another highly affected group are the families of workers laid off. They find themselves unemployed in a deep recession with collapsing social safety nets. Affected here too are the unions whose job it is to represent worker’s interests, particularly the top-heavy state employees union: “ATE”. Both groups are furious and frightened but they are more than willing to take Milei into direct confrontation with Milei’s ideas. Indeed this has already begun and it will only accelerate after Easter. National strikes have been called for and marches will intensify all across the country. These mobilizations will inevitably become increasingly violent as Milei’s own security forces are champing at the bit for more street confrontation now that their hands have been freed from legal restraints by the former terrorist, now Security Minister, Patricia Bullrich. 

Finally there are those who are not at all directly affected by state cuts (principally in the middle and upper classes). Their reactions can be divided up into various sectors: there are the progressives and the nationalist Argentinians who love their state and hate to see it shrunk and sold off to the lowest bidder. This sector are increasingly becoming active against Milei out of principle. A second sub-group are the non-nationalist conservatives and the libertarians themselves who are still hoping beyond hope for light at the end of the tunnel. Their direct support (and online promotion of Milei’s lion memes and other social-media hero branding) are becoming more muted as their own family and friends face the societal costs of Milei’s policies. This sub-group can be divided into two or three sub-groups. First there are the libertarian fans, mostly younger men, who still see Milei (and the LLA) as a heroic group and are clinging to the hope that drastic state reduction will somehow liberate money from the state powering a new liberal Argentine society through growth in the private sector and a magical reappearance of competitiveness. They still believe that macroeconomic reality is a zero-sum game, that it is still possible (if improbable) after this painful hump has passed because Javi told them so. Like football fans of a third division football club; they are loyal and will continue to believe in mythical success. Another sub-group is the conservative anti-K (Christina Fernandez de Kirchner). These are largely elderly voters who are doubling down on their vote for Milei as they are not yet willing to confront the possibility that they may have made a grave mistake in switching their support from the JxC coalition when their own candidate, Patricia Bullrich, was soundly eliminated. Finally there is a third, very reduced sector, mainly supporters of the PRO (including the leader Macri), that are salivating at the mouth from the huge profits to be made out of privatizations. They have activated their media ownership and their vast powers of persuasion to try to sustain what remains of the support for Milei because they want to take a piece of the action, and soon. They too are Milei fans, though they are often more conservative neoliberal rather than libertarians by choice. They see the money stacked on the table and they have the resources to survive and prosper while society collapses. Many of this small group care little or nothing about the local society and indeed often prefer to live abroad in Miami or Europe.

Cuts at Easter

While the nation was taking an Easter Break Milei announced that more than 70,000 public employees were earmarked for lay-offs. This procedure would begin with 15,000 by the end of March without counting likely cuts in South America’s largest public health plan (PAMI) nor cuts in workforces in public companies being thinned down prior to privatization. There were no immediately obvious patterns in the logic of which workers were being chosen for dismissal. Previously it had been thought that recent workforce additions would go first but some of the first contracts not to be renewed included workers who had been working in their offices for decades. The corruption in some sectors of the state with political appointees being paid to not turn up for work (the famous gnocchi’s or employees who only came in for their pay checks at the end of the month) were not targeted as they were in some cases the most difficult to fire. Soon they might be the majority of employees in some public services.

One illustrative example are the planned cuts were 150 employees in the National Meteorological Agency, of which 54 had already received dismissal notices before Easter. Reductions in personnel at the national weather services are not uncommon when a climate change denier takes presidential power, but the SMN had been busy in March with extraordinary floods across the north of the country (including the capital Buenos Aires) which, apart from flooding streets and houses, had drowned agro-industrial export-focussed production and helped enhance the ensuing dengue outbreak, the worst ever experienced, which was still raging through the population during Easter.

SMN were not alone. By late March cuts in personnel have already begun to affect almost all departments of the State barring the secret services. The pattern was decidedly anti-labour, anti-women, and of course anti-poor, especially the rural poor. Human rights protections were cut but every aspect of the state is under the chainsaw. The largest cuts began in the Departments of Labour with Social Services, especially ANSES the public pensions (being gutted for privatization). Women’s and Human rights (particulary gender, Native American and anti-racism protections) were also badly hit as were cuts in services for the old and the poor. Sea and river ports, road transport and fisheries regulation took the brunt of deregulation. Defunded were Argentina’s government support for culture, particularly the famous INCAA, film making agency but theatre too. Also included in the cutbacks are The National Geographic Institute, The National Institute of Public Administration (INAP) and (announced with liberal glee) The Institute to reduce Discrimination, Xenophobia and Racism (INADI) which was completely eliminated.

The table below shows the extent of the first wave of cuts by sector but don’t include AYSA, the water company, Public Television, Public Radio or the news agency Telam, nor the National Mail (Correo Argentina) which had already been privatized under Menem then re-nationalized and is being primed for privatisation again, a disruptive process that has helped to make it the most expensive mail service on the planet. Even the National Library was to lose people which is hardly a surprise for a generation that is manipulated by tweets not books.

Collapsing Reduction Takes its Toll

Ironically even the libertarian reduction of the Argentine government was itself collapsing. Armando Guibert had been recently made responsible for reducing the state was given the grandiose title of “Secretary for the transformation of the state and public functions”. Armando himself resigned in March (for purely personal reasons of course). Guibert was a trusted operator from the Macri days and a confidant of Sturzenegger and had been selected by Nicolas Possé who headed up Milei’s war room cabinet. Possé also recently fired Guillermo Ferraro, the Minister for Infrastructure for the dreadful mistake of leaking democratic operations from cabinet decisions to the press. Ferraro only lasted 40 days. One small incident in Tierra del Fuego, Argentina’s last outpost before Antarctica and the Malvinas, revealed the fragility of the inexperienced house of cards that was Milei’s government but the toothfish scandal is a story for another day.

First Phase State Reduction, Nos. from The Easter Vacation

  • Pensions & Social Security / Anses: 1,200
  • Family Agriculture Secretariat / Secretaría de Agricultura Familiar: 900
  • “Human capital” / Ministerio de Capital Humano: 800
  • Local Social Services / Centros de Referencia de Desarrollo Social (CDR): 600
  • Labour / Secretaría de Trabajo: 517
  • Disabled People / Agencia Nacional de Discapacidad: 332
  • Children, Adolescence and Family / Secretaría de Niñez, Adolescencia y Familia (Senaf): 300
  • Civilians in Armed Forces / Personal Civil de las Fuerzas Armadas: 280
  • Commerce / Secretaría de Comercio: 225
  • Culture / Secretaría de Cultura: 208
  • Art and Culture, Museums / Nación ART: 200
  • Film Productions and public cinemas / INCAA: 170
  • Port Administration / Administración General de Puertos: 185
  • Rivers and Waterways / Acumar: 120
  • Sport / Cenard (Centro Nacional de Alto Rendimiento Deportivo): 120
  • Women’s Rights / Subsecretaría de la Mujer: 150
  • National Statistics / Indec: 100
  • Road Safety / Agencia Nacional de Seguridad Vial (ANSV): 89
  • Conicet: 87
  • National Weather Service / Servicio Meteorológico Nacional: 80
  • National Parks / Parques Nacionales: 79
  • Roads / Vialidad: 67
  • Fisheries Development / Instituto Nacional de Investigación y Desarrollo Pesquero (INIDEP): 40
  • Ministry of Economics / Ministerio de Economía: 26
  • Consumer Rights / COPREC (Servicio de Conciliación Previa en las Relaciones de Consumo): 25
  • Energy / Secretaría de Energía: 21
  • Human Rights / Secretaría de Derechos Humanos: 12
  • Regulation of Transport / CNRT (Comisión Nacional de Regulación del Transporte): 2

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